Brian Monteith: Oil fund possible, but not safe

Picture: AFP/Getty
Picture: AFP/Getty
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The SNP’s plan is plausible, but any pot would be raided as soon as economic troubles hit, writes Brian Monteith

There are moments when I recall my youth as a conservative student in the dying days of Jim Callaghan’s government and the dawn of what was called Thatcherism as if it was only last week, and yet so much of then appears to have been rather conveniently forgotten, as our recent history is reshaped to fit the narrative of today’s politicians.

I am reminded of the day in 1980 I first attended a national meeting of the Scottish Young Conservatives and found to my horror that the new prime minister’s chief opposition would come not from Labour politicians and trade unionists – but from a fifth column in the party’s own ranks that at every opportunity was keen to cut a deal with collectivists and sue for peace.

It was not that such faint-hearts were especially marshalled to defeat her (although they did have a sort of old-boys-in tweed-skirts network) it was simply that the prevailing mindset of the Scottish Conservative establishment was disposed towards the received wisdom of state intervention. This included public ownership of industry being in the national interest, applying a prices and incomes policy to fight Labour’s cost of living crisis and almost daily state involvement in solving industrial disputes.

A motion called on Margaret Thatcher to put yet more taxpayers’ money into failing Clydeside shipyards, and although it was defeated after a close debate, it was a precursor to similar appeals from many Scottish Conservatives for her to intervene and save other nationalised enterprises, save Gartcosh, save Ravenscraig, save the coal mines and take other such initiatives that would show the Conservatives cared about Scotland.

My point here is not to defend Thatcher’s actions – that is for another time – but to illustrate that if the Conservative prime minister was under such incessant pressure from within her own ranks then one can more easily appreciate the default position of the Scottish political establishment, most newspaper editorials and media commentary. State intervention in the economy had been accepted and repeatedly justified by all parties since the end of the last war and whenever a new problem surfaced it was the first response of most politicians.

It is important to understand just how suffocating, how perfidious this view was in the 1970s and 80s to understand why there never was such a thing as an oil fund, established for the benefit of the UK, or solely Scotland, in the future.

That the tax revenues accruing from oil exploration and production from chiefly Scottish waters went to the UK Treasury is not disputed, nor is the fact that they were used in part to underwrite an economic transformation to a more modern British economy that might pay its way. What is forgotten is just how often those revenues were used to help adjust the change that was required in Scotland, all the more so because it had a greater concentration of heavy industries that were being priced out of existence from global competition.

Some argue that was a squandering of public wealth, that had Scotland been independent we could have garnered our own oil fund to match that of Norway’s. Such an attitude ignores the nature of Scotland’s past economy and is to presuppose that all those state-owned and generally loss-making steelyards, shipyards, mines and railway engineering shops would have somehow ceased to be a drain on the public purse if Thatcherism stopped at Hadrian’s Wall.

Oil revenues could most certainly have gone into a fund that might grow and the interest be used for the benefit of future Scottish economic demands, but the state investment in closures, including retraining, environmental clean-up, locate in Scotland hand-outs, new business start-ups and general improvement in infrastructure – not to mention the benefits to ease the pain – could not have been afforded at the same time.

Indeed, had so many of the factory names that are now little more than proud memories or our industrial folklore been encouraged to continue, the very politicians who now tell us we should have had an oil fund are the very same people that back then would have been at the front of the queue demanding state money be used for the good of this or that threatened Scottish industry.

We would be told it had a strategic importance, that Scotland would somehow be incomplete without such an industry, that our nation could yet be a world leader again, that thousand of jobs needed saving as well as thousands more that supplied them.

It would not end with the ailing state industries for such a mindset sees little distinction between public and private such as Bathgate (public) and Linwood (private) and does not baulk at throwing taxpayers’ money at enterprises others believe a bad investment.

If you doubt this you just have to go back to the news reporting of those times and you will find demands being made upon the Conservative government to step in and save such enterprises. This was not an entirely Scottish pursuit; similar demands were made for industrial rescue in Merseyside, Wearside, Wales and the Midlands – but the idea that having both state intervention and a growing oil fund would have been possible is a fiction peculiar to Scotland.

All of this is important, for as Alex Salmond, Nicola Sturgeon and John Swinney take us down our own road to Damascus we are being told that Scotland can now have an oil fund that will be of great benefit to future generations. And yet these are the same people who have shown a startling willingness to step forward to save Prestwick airport and were prepared to consider all options to save Grangemouth’s Ineos petrochemical plant.

We are being offered political promises by people who have a record of not keeping them, or when they do, of bad management and catalogued failures. Independence should be more than that, it should be about liberty from subjugation, self-determination and constitutional protection from over-governance – precisely the opposite route that the SNP is offering to take us in its white paper.

It is one thing to suggest an independent Scotland would have an oil fund, it is to deny past experience for the same politicians to pretend they would not seek to raid it at the slightest hint of economic trouble.

• Brian Monteith is policy director of